In news-Recently, the Union Finance Minister asked all stakeholders to conclude Loan Guarantee Scheme for Covid-Affected Sectors (LGSCAS) aimed at shoring up healthcare infrastructure in non-metros in time to deal with any future third wave.
- The Loan Guarantee Scheme for COVID-19 Affected Sectors was approved by the Union Cabinet on 30th June 2021.
- It provides guarantee to Scheduled Commercial Banks (SCBs) for loans given for new projects i.e Greenfield projects and for expansion i.e. Brownfield projects related to healthcare infrastructure.
- The Scheme is aimed at upscaling the medical infrastructure in the country specifically targeting underserved areas.
- It is a scheme to provide guarantee by National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) for fund based or non-fund based facility upto Rs.100 crore extended by SCBs to eligible projects for setting up of or for modernising /expansion of:
- Hospitals/dispensaries/clinics/medical colleges/pathology labs/diagnostic centres.
- Facilities for manufacturing of vaccines/oxygen/ventilators/priority medical devices.
- Public healthcare facilities (the said projects should be in non-Metro cities).
- Loans under the scheme are made available at a cheaper interest rate of 7.95%.
- LGSCAS provides a guarantee of 50 percent for brownfield projects and 75 per cent to greenfield projects for loans sanctioned up to Rs.100 crore, set up at urban or rural locations other than 8 Metropolitan Tier 1 cities (Class X cities).
- For aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects is 75%.
- The Scheme is applicable to all eligible loans sanctioned up to 31.03.2022, or till an amount of Rs. 50,000 crore is sanctioned, whichever is earlier.
National Credit Guarantee Trustee Company (NCGTC)-
- NCGTC is a private limited company incorporated under the Companies Act 1956 on March 28, 2014.
- It was established by the Department of Financial Services, Ministry of Finance, as a wholly owned company of the Government of India, to act as a common trustee company for multiple credit guarantee funds.
- The intent of NCGTC is therefore, to manage multiple guarantee schemes as part of a larger financial inclusion programme of the government covering different cross-sections and segments of the economy like students, micro entrepreneurs, women entrepreneurs, SMEs, skill and vocational training needs, etc.
The following Credit Guarantee Trust Funds are under the trusteeship management of NCGTC:
- Credit Guarantee Fund for Skill Development (CGFSD).
- Credit Guarantee Fund for Education Loans (CGFEL).
- Credit Guarantee Fund for Factoring (CGFF).
- Credit Guarantee Fund for Micro Units (CGFMU).
- Credit Guarantee Fund for Stand Up India (CGFSI).
- Emergency Credit Line Guarantee Scheme (ECLGS).
- Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS).
Credit Guarantee Scheme for MFIs.